The discussion about the use of Bitcoin
and cryptocurrencies to fund terrorism and criminal activity has been going on for a long time. In fact, almost since the inception of Bitcoin. In the history of cryptocurrencies, there have been countless instances of ransomware attacks (attacks that use malware to restrict access to systems and data and require a ransom to be paid in order to unlock it again). Sponsored Sponsored
An example is Colonial Pipeline, a U.S. oil pipeline system that originates in Houston, Texas, and transports gasoline and jet fuel primarily to the southeastern United States. The company suffered a cyber attack that disrupted the computer system that manages the pipeline. Hackers from the Darkside group demanded a ransom in Bitcoin in exchange for restoring operations, and the company paid it. It was the largest cyber attack on oil infrastructure in US history. However, US authorities later announced
that they had successfully recovered the ransom.
Anonymity and speed of transfer are weapons of criminals and terrorists
It is said that some countries such as Cuba, Venezuela, Iran and North Korea are using cryptocurrencies to get around the strict embargo supported by the international community. However, the high anonymity of
cryptocurrencies is also perfect for criminals. Sponsored Sponsored
The fact that the propagation of terrorism, especially Islamic terrorism, is now also taking place online makes digital currencies a useful tool for financing this type of criminal activity. In the short history of cryptocurrencies, we have already heard of this type of situation many times.
On July 6, Leicester police arrested Hisham Chaudhary
, an Islamic Jihad supporter who was accused of sending thousands of dollars in Bitcoins to a terrorist group operating in Syria.
. Some $28 million was said to have flowed through this address over a two-year period, likely used to fund the group’s terrorist activities.
Bitcoin and terrorism
According to estimates by the University of Sydney, 44% of Bitco transactions
in is used for criminal activity (about $72 billion).
Rob Wainwright, former director of Europol, stated in 2018 that cryptocurrencies are responsible for about 3 to 4 billion euros, or about 3 to 4% of illegally laundered revenue annually in Europe alone.
Latin America and the Caribbean is where the first major international digital currency laundering scandal took place. Indeed, in 2013, $6 billion was laundered from drug trafficking, investment fraud, credit card fraud and data theft.
Nor is the interest of global Islamic terrorist groups such as Daesh and Al Qaeda in cryptocurrencies new. They have been encouraging their use since this novel financial instrument was first introduced to the market.
The fact that transfers are anonymous and instantaneous makes them ideal for financing criminal or terrorist activities. Before the invention of Bitcoin, a network was used that equally guaranteed anonymity – Hawala. However, it was more expensive and slower than transferring money via blockchain.
Special units and regulations to combat illegal crypto activity
Financial and law enforcement agencies are increasingly focused on investigating criminal activity funded through digital currencies. In 2019, the United States, to deal with the rise in the use of cryptocurrencies by terrorist groups, created an ad hoc law. It formed the Financial Technology Task Force to track suspicious money movements.
In 2019, Australia enacted “the Anti-Money Laundering And Counter Terrorism Financing Act. “ This act for the first time created a task force with a similar task to that of the US. Similar structures were also created in Korea, the UK and Estonia.
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